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[DraggdOut]

*disclaimer: I am almost completely hedged on single names and flat on index positions, I have no prevailing micro view and I am very cautious toward US domestic markets* - the dominant ST trend is up, the IT trend is still down. Whichever prevails into next week is the definitive IT trend. - Bernake's speech this morning will dissapoint the bulls: Ben is an academic, and his style, an acute departure from Greenspan, has been to confine his remarks on monetary policy and the economic outlook to FOMC meetings. My prediction is Bernake will cut by 25bps on 9/18, but there is no reason for him to make any allusion to it at Jackson hole. Not only would it be inappropriate for him to make such comments at a large conference given the type of speech and the opening remarks, it would be completely out of character for him to do so. I am not counting it out entirely, but realize that--throughout the entirety of this credit conundrum--the Fed has been behind the street--it has been reactionary, and largely, under-reactionary. Lowering the discount rate was a helpful first step, but if you'll notice after B of A, Citi, Wachovia, & JPM went to the window nobody else has tapped the line since. Moreover, ABCP is still seizuring, and the fed's decision to accept credit-enhanced IG ABCP as collateral was more a soothing gesture than any sort of geniune fiscal alleviation. Read the fine print: the collateral haircut is so significant (40%) that it's utterly useless. In my eyes, this raises an interesting question: can one reasonably infer from the fed's actions that they see the banks not needing any help or bailout? and, if that is in fact the case, where is the perception disconnect: the fed or the street? On this note, all bets are off--only time will tell.